SC ECON 224 - Final Exam Study Guide (27 pages)

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Final Exam Study Guide



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Final Exam Study Guide

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Pages:
27
Type:
Study Guide
School:
University Of South Carolina-Columbia
Course:
Econ 224 - Intro to Economics
Intro to Economics Documents

Unformatted text preview:

ECON 224 1st Edition Final Exam Study Guide This study guide is separated into the different modules that will be covered on the Final Exam GDP and Economic Growth Gross Domestic Product GDP Measures the total income of everyone in the economy GDP also measures total expenditures on the economy s output of goods and services For the economy as a whole income equals expenditure because every dollar a buyer spends is a dollar of income for the seller Why is GDP Important GDP is used in three different ways o Explore short run fluctuations in the business cycle o Show and compare standards of living across countries Ex US compared to European countries o Explore long run economic growth Overtime how has our income changed Gross Domestic Product GDP Is the market value of all final goods and services produced within a country in a given period of time Market value goods are valued at their market prices so o All goods measured in the same units ex dollars in the U S o Things that don t have a market value are excluded Ex housework you do for yourself Anything you do for yourself does not have market value If you pay someone else to do it that would be included Final goods intended for the end user o Intermediate goods used as components or ingredients in the production of other goods Not the last user if I use it to produce something else in the future not included in GDP Ex Buy lettuce to make a salad sell the salad and charge consumer for salad o GDP only includes final goods they already embody the value of the intermediate goods used in their production GDP includes tangible goods like DVDs mountain bikes beer and intangible services dry cleaning concerts cell phone service GDP includes currently produced goods not goods produced in the past o Usually a year or a quarter 3 months GDP measures the value of production that occurs within a country s borders whether done by its own citizens or by foreigners located there Avoiding Multiple Counting Excludes financial



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